GST reduction on fans to 5% will boost product sales, says IFMA

The goods and services tax (GST) reduction from 18 percent to 5 percent on fans will help boost the product sales, said the Indian Fan Manufacturers Association (IFMA).

Speaking at a virtual event on the ‘Atmanirbhar Fan Industry’, Atul Jain, president of IFMA, said the association has met the finance ministry as well as the Central Board of Indirect Taxes and Customs officials on this matter.

“Fans are the most common consumer durable product in India. Close to 74 percent households (roughly 1,000 million people) have a fan at home. Hence, it is necessary to reduce the GST rate so that customers can also benefit,” he added.

If the GST rate is reduced, the prices of fans will also automatically come down by 10-13 percent since the fan manufacturers will be able to pass on the tax savings to the customers in the form of reduced selling price.

The organised fan industry in India is estimated to be Rs 8,000 crore and is growing at 7-8 percent every year.

Jain said 98 percent of the ceiling fans are manufactured in India and that the industry is working on making 100 percent of the products in India.

“Table fans is a category where 40-50 percent of the products are imported. We are hoping that the industry will be able to establish manufacturing capacity in India in the near future for this segment as well,” he added.

Jain explained that amidst the COVID-19 pandemic, fans are a useful product to increase air circulation and ventilation in closed spaces, thereby providing safer environments.

In April 2020, Prime Minister Narendra Modi had called for a self-reliant India or Atmanirbhar Bharat where he called companies to manufacture locally. He added that this will be a mission to nurture local manufacturing capabilities to deal with the disruption caused by the COVID-19 pandemic.

Due to the pandemic, the fan industry saw a 35 percent dip in sales in peak seasons of April and May. However, IFMA said the industry has recovered. It did not share exact sale numbers.

Ravindra Singh Negi, president, Havells said even in work environments, a mix of fans and air conditioners are now being preferred to ensure that there is adequate cross ventilation. On the table fan imports, Negi added that the industry will be able to scale up quickly to manufacture locally.